Processes such as the e-KYC have allowed insurance companies to significantly reduce their operating time
Over the last few months, digital technologies have been transforming the Indian insurance industry completely. In view of the ongoing pandemic and to limit the spread of COVID-19, most insurers are slowly and steadily turning to digital tools to have some sense of normality. Of course, it's important to shift to digital modes in order to be able to operate effectively. Digital platforms have allowed the insurance sector to reach and engage with customers on a broader aspect with the help of integrated apps and social channels. Processes such as electronic know-your-customer (e-KYC) have allowed insurance companies to significantly reduce their operating time to retain existing customers and to acquire new customers and efficiently leverage technology in order to create competitive advantages.
Video-based KYC for new customers
The insurance regulatory body – IRDAI – in a recent announcement has now given the nod for allowing video-based KYC to issue new policies to customers. The initiative has been taken by keeping in mind the current pandemic situation and to keep people at their homes to limit the spread of COVID-19. As per the letter issued to the insurers, IRDAI has stated that in a bid to simplify the process of KYC, it is advisable to leverage the several electronic platforms and make it customer friendly and improve the ease of doing business. This is being seen as a great move in the long run, as the distance between the customer and servicing entity, i.e., the insurer would cease to be an issue and anyone can get serviced by their chosen insurer while being physically present in any part of the country. Customers can buy both life and health insurance through video-based KYC from the insurer of their choice.
As per the guidelines issued by IRDAI, insurers have been asked to create their own application and perform live VBIP, which needs to be done by an authorised person appointed by the insurer. The person shall be responsible for establishment, continuation or verification of an account-based relationship with a customer post obtaining the customer’s informed consent. The entire process shall be video recorded as well as it is important to capture live photograph of the customer during the identification and collect the identification information. Also, it must be ensured that the authorised person of the insurer shall ensure that the video is clear and the customer in the video shall be easily recognisable. While conducting video-based KYC, it must also be ensured that the photograph of the customer in the Aadhaar matches with the customer undertaking the VBIP and the identity in the Aadhaar shall match with the details given by the customer.
Now buy any general insurance cover through an OTP
In another set of circulars issued last week, IRDAI has allowed all general and specialised health insurers to validate health as well as motor insurance policy proposals forms through digital means in the place of physical signatures. The regulator said that the insurers will give its customers an option to give their agreement for purchasing a policy to the insurer via a one-time-password, in place of wet signature on the hard copy of the proposal form. The initiative has been taken in the wake of the ongoing coronavirus pandemic and the safety of the policyholders. As per the circular issued to the insurers, the policy document will be sent on the customer’s registered email ID or mobile number. The customer will also be intimated through an SMS that the policy document/copy of proposal form has been sent to their registered e-mail ID.
However, insurers must note that wherever policy documents could not be sent through electronic means due to any reasons, the insurer will need to send a physical copy of the documents to the policyholders registered address. For the common man, the step will result in a quicker and hassle-free policy issuance process that will help in bringing further transparency and security as everything will be done as per electronic format.(The writer is Head - Product and Innovation, PolicyBazaar.com)